Well there was a glimmer of hope in the markets from our friends across the pond in the US. They announced yesterday that interest rates would ‘probably’ remain at their current level of between 0% and 0.25% until at least the middle of 2013. Thank god our prayers are answered, finally an end to the recent down turn, and the survey said, uh-uh (imagine the family fortunes noise). I think my favourite quote is from BBC News
“University of Oregon economist Timothy Duy described the Fed’s announcement as “weak medicine”
Weak medicine, more like a placebo. Who in their right mind thought that this was enough to stem the crashing markets that we have been seeing. I didn’t think for one minute it would be enough. It was enough however to produce a bear market rally, or at least that’s what I’m calling it. With hindsight I should’ve spread bet the FTSE 100. What did I say in my last post, it would fall below 5000, then recover to above 5000 before falling back below it. Well two out of those three steps have emerged and I suspect with all this speculation about France now it wont be long before it’s back below it. That said I made those comments merely from my own observations over the last few years. It just seems to be the way the prices react around the round numbers like 5000. I think spread betting this observation however would be foolish of me and no doubt I would lose money because of it. I’ll stick to my strategy for now. If the downwards move continues there will be plenty of shorting opportunities along the way for me.
Interestingly Vince Stanziones Spread Trading system would’ve seen you short the FTSE 100 back at the end of July(*Correction: It was the 18th July not the end) and by now you would be doing very nicely from it thank you very much. You would currently be sitting on about 700-800 points profit. If you would like to find out more about Vinces system you can read about it on Vince Stanziones Website.
My own spread betting has seen no new trades, just maintenance (moving stops) of existing ones. I had a look earlier for new trades but nothing that fits the bill has come along so I’m waiting. I’m kind of torn in times of high volatility such as now. On the one hand I think I might be missing out, but on the other I’m happy to wait until things settle down a little more. I mean look at trading yesterday. By my calculations the FTSE 100 traded in a range of over 300 points. That’s huge. I don’t think I could handle swings that big. That could easily wipe out my account in one day. Best to leave it alone for now. Once the markets have settled down there will be plenty of opportunities ripe for the picking.
Until next time,
“May the markets be with you!”
The Spread Betting Beginner